Township of Newtown, PA Police Pension Plan

Members shall pay into the fund at a rate of 5% of compensation. "Compensation," for this purpose, shall be as defined in the definition of "compensation" in § 30-14A of the plan.

The Board may, on an annual basis, by ordinance or resolution, reduce or eliminate payments into the fund by members. Individual records of contributions by members shall be maintained, including all interest credited to their individual accounts. Interest to be credited shall be 3% compounded annually.

Interest shall be credited from the end of the plan year in which paid to the end of the month after which a refund becomes payable.

Refund of member's contributions. Any member who, for any reason, shall be ineligible to receive a pension after having made contributions shall be entitled to a refund of his individual account balance; such refund is payable immediately upon discontinuance of his employment with the police force or within a reasonable time (not more than 45 days after discontinuance). If such discontinuance is due to death, then such refund shall be paid to his designated beneficiary or, in the absence thereof, to his estate.

Deposits. Contributions by members shall be remitted to the trustee monthly.

State aid. The portion of the payments made by the State Treasurer to the Township and designated by the Board to be allocated to the Police Pension Fund from money received from taxes paid upon premiums by foreign casualty insurance companies for purposes of pension retirement or disability benefits for policemen shall be used as follows:

To reduce the unfunded liability; or, after such liability has been fully funded.

To apply against the annual obligation of the Township for future service costs; or, to the extent that the payment may be in excess of such obligations.

To reduce member contributions pursuant to § 30-16A hereof.

Township contributions. Subject to the provisions and limitations set forth in other articles of this plan, the Township shall contribute the amounts certified to be necessary by the fund's actuary to provide the benefits provided by this plan.

Other contributions. The fund shall be authorized to receive, by gift, grant, devise or bequest, any money or property, real, personal or mixed, in trust for the benefit of the fund. The trustee of the fund shall be subject to such directions not inconsistent with this plan as the donors of such funds and property may prescribe.

§ 30-17 Retirement benefits.

Normal retirement.

Each member may retire on or at any time after his normal retirement date. Any member so retiring shall be entitled to receive a monthly pension commencing as of the first day following his date of actual retirement and ending with the payment made as of the first day of the month in which his death occurs. The monthly pension to which such retired member shall be entitled under this plan shall be equal to 50% of such member's average applicable compensation.

In addition to the monthly retirement benefit described above, each member who has completed in excess of 25 years of service shall receive an additional monthly pension benefit equal to $100 for each completed year of service in excess of 25 years, up to a maximum of $200 per month. This service increment shall be paid, provided that the following conditions are met:

(a)

The member retired by age 62; and

(b)

The amount of the service increment shall not exceed limits authorized by state law.

Postponed retirement. An employee shall be allowed to continue as an employee beyond his normal retirement date. In such case, the employee shall remain a member of the plan until he actually retires or ceases to be an employee. Any contributions required pursuant to § 30-16A hereof shall continue.

Disability benefit.

If a member retires because of a total and permanent disability, he shall be entitled to receive an amount equal to 100% of the member's annual base salary at the time of the disability. This pension shall continue until the member returns to work or until the member reaches what would have been his normal retirement date, when the percentage shall be reduced to 50%. Any member hired after January 1, 2009, and retirees because of a total and permanent disability, shall be entitled to receive an amount equal to 75% of the member's annual base salary at the time of disability.

In either case, the benefit addressed above shall be offset by the full amount of any workers' compensation, social security, or Township-provided disability insurance benefits and 50% of any earnings from other employment subsequent to the disability. "Annual base salary"shall mean the amount paid to a member at the appropriate rank and, if applicable, step within the rank, exclusive of all fringe benefits, such as night differential, longevity and overtime.

A disabled member shall pursue the maximum workers' compensation benefits to which the member may be entitled and may not commute any such benefit without approval by the Township. The determination of benefits shall not be affected by any assignment or pledge of workers' compensation proceeds to a third party. The Township shall be required to provide legal counsel to a disabled member in case of a disputed workers' compensation claim.

Early Retirement Benefit. Each member may retire on or at any time after his early retirement date. Prior to termination, the member must file with the Secretary of the Township a written notice of his intention to elect an early retirement benefit. This benefit shall become effective as of the date of the notice or the date designated in the notice, whichever is later. The amount of the early retirement benefit shall be the actuarial equivalent of a vested retirement benefit as computed in § 30-19. The actuarial equivalent of the vested retirement benefit shall be determined by actuarially reducing the vested retirement benefit to reflect that it will commence on the effective date of the early retirement rather than on the member's normal retirement date. The actuarial reduction shall be calculated using the actuarial assumptions reported in the last actuarial valuation report filed with the Public Employee Retirement Commission.

Cost-of-living adjustment. There shall be a cost-of-living increase provided to all members who retire; provided, however, that such annual cost-of-living increase shall not exceed the percentage increase in the All Urban Consumers C.P.I. for the Philadelphia Metropolitan Area from the year in which the police officer last worked; provided, further, that in no case shall the total police pension benefits exceed 75% of the salary for computing retirement benefits; provided, further, that the total cost-of-living increase shall not exceed 30%. No cost-of-living increase(s) shall be granted which would impair the actuarial soundness of the plan. All adjustments shall be made in January and calculated on the twelve-month percentage change in the consumer price index as of the previous December.

§ 30-18 Death benefits.

Death Benefit if No Surviving Spouse Nor Dependent Children. If a member dies prior to the commencement of pension benefits, then his designated beneficiary shall be entitled to a refund of his accumulated member's contributions with credited interest. If no beneficiary survives, then the refund is payable to the member's estate.

Pension Benefit to Surviving Spouse and Dependent Children.

If a member dies survived by a spouse or dependent children, after having become eligible to receive a pension benefit [i.e., he was eligible because (a) he was already receiving a pension, or (b) he met the age and service requirements but he had not yet retired], then a monthly pension benefit shall be provided.

The amount of the monthly pension benefit shall be 50% of the pension the member was receiving or would have been entitled to receive if he had been retired at the time of his death.

In the event a member dies after completing 12 or more years of service but was not yet eligible for normal retirement or preretirement survivor benefits, the surviving spouse shall act on behalf of the member in selecting the alternative addressed in § 30-19A. If a vested benefit is selected, the surviving spouse shall receive 50% of the member's vested monthly benefit, commencing on the first day of the month following the member's normal retirement date.

(4)

In the event a member dies after completing 20 or more years of service but was not yet eligible for normal retirement or preretirement survivor benefits, the surviving spouse shall act on behalf of the member in selecting the alternative addressed in § 30-19A.

(5)

If an early retirement benefit is selected, the surviving spouse shall receive 50% of the member's monthly early retirement benefit, commencing on the first day of the month following the election of this benefit.

The monthly pension benefit is payable to the surviving spouse until death, or then to surviving dependent children under the age of 18 years or, if attending college, until attaining the age of 23 years. "Attending college" shall mean the eligible children are registered at an accredited institution of higher learning and are carrying a minimum courseload of seven credit hours per semester. Dependent children shall include adopted children and any child conceived before the time of the member's death and thereafter born to the member's spouse.

Preretirement Survivor Benefit.

In the event a member is killed in service, the member's family shall receive the benefits provided for and subject to the terms of Act 51 of 2009, which benefits are paid exclusively by the Commonwealth of Pennsylvania, with the exception of any pension benefit to which the member was entitled prior to the member's death solely by virtue of the member's service as a Township police officer (i.e., either a normal, early, or vested pension benefit). It is understood that "family" shall refer to the surviving spouse and dependent children. The benefit is payable to the surviving spouse until death, then to the surviving dependent children under the age of 18 years or, if attending college, until attaining the age of 23 years. The terms "dependent children" and "attending college" shall be consistent with those of § 30-18C.

§ 30-19 Severance of employment.

If a member leaves the employ of the Township or ceases to be a member, whether by reason of his transfer, resignation or discharge, or by reason of disability or retirement other than after becoming eligible for benefits pursuant to § 30-17 or 30-18 of this plan, he shall be entitled to a refund of all contributions made by him and then on deposit in the fund, plus interest thereon, computed at the rate described in § 30-16A. However, a member who has completed 12 or more years of service may elect either Subsection A or B as described below:

He may elect to leave his contributions, plus interest, in the fund so as to receive a vested pension benefit to start at his normal retirement date. He must file with the Secretary of the Township, within 90 days of the date he ceases to be a full-time police officer, a written notice of his intention to vest. The amount of the vested pension benefit shall be (x) divided by (y) where (x) is the number of years of service at the date of termination and (y) is the number of years of service which the member would have had if he worked until his/her normal retirement date, multiplied by the benefits described in § 30-17A. Years of service shall be measured in years and completed months.

He may elect to receive a refund of all contributions made by him and then on deposit in the trust fund, plus interest thereon, computed at the rate described in § 30-16A. If he elects to receive the refund of his contributions plus interest, he would forfeit the pension benefit outlined in Subsection A.

§ 30-20 Method of distribution of benefits.

Refund benefits becoming distributable pursuant to § 30-19 and death benefits becoming distributable pursuant to the provision of § 30-18A shall be paid in the form of a lump-sum distribution.

The normal form of all benefits payable hereunder shall be a pension for the life of the member, commencing on the date specified and ending with a payment made on the first day of the month in which the member dies; subject, however, to the payment of a death benefit calculated pursuant to § 30-18B.

§ 30-21 Management of fund.

It is the duty of the trustee to pay the benefits to members and their beneficiaries, as provided in §§ 30-17, 30-18 and 30-19, in accordance with the instructions received from the Board; provided, however, that the duty of the trustee to make such payments is wholly contingent upon the sufficiency of the fund for such purposes.

The Township may employ an actuary, investment advisors, counsel, or other professional consultants from time to time in connection with the operation of the fund or of this plan. Such persons or entities shall be compensated by the Township at such rates as may be agreed upon by the Board. Such compensation may be paid from the fund.

The trustee shall make an annual determination of the fair market value of the fund as of the anniversary date and as of such additional dates as the Board may direct.

The fair market value of the fund shall be reported to the actuary, who shall calculate the amount to be contributed to the fund by the Township with respect to each plan year in accordance with the assumptions most recently adopted by the Board for the purpose of such computations; provided, however, that the liability of the Township to make such contributions is subject to all of the conditions and limitations set forth elsewhere in this plan.

§ 30-22 Duties of the Board.

The plan shall be administered by the Board of the Township of Newtown. The Board shall make and adopt rules and regulations for the efficient administration of the plan.

The Board shall keep all data, records and documents pertaining to the administration of the plan, and shall execute all documents necessary to carry out the provisions of the plan, and shall provide all such data, records and documents to the professionals whose services are employed pursuant to § 30-21 of this plan.

The Board shall construe the plan, shall determine any questions or fact arising under the plan and shall make all decisions required of it under the plan. Decisions and actions taken thereon in good faith shall be final and conclusive. It may correct any defect or supply any omission or reconcile any inconsistency in such manner and to such extent as it shall be the sole judge of such expediency. The Board shall act uniformly with respect to matters coming before it concerning employees in similar circumstances.

The members of the Board, and each of them, shall be free of all liability for any act or omission except by willful misconduct or gross negligence, and each of them shall be fully indemnified by the Township against all judgments not involving findings of their respective personal or collective willful misconduct or gross negligence and against all costs, including counsel fees, incurred in defense of actions brought against them.

The Board shall make available to members, retired members and terminated members and to their beneficiaries, for examination during business hours, such records as pertain to the person examining.

To enable the Board to perform its function, the Township administration shall supply full and timely information to it on all matters relating to the pay of all members, their retirement, death, termination of employment and such other pertinent facts as the Board may require.

The Board shall enact such rules and regulations for the conduct of its business and for the administration of the plan as it may consider desirable, provided the same shall not be in conflict with any of the provisions of the plan. All actions of the Board shall be taken at meetings at which at least three members shall be present, or by written resolutions concurred in by not fewer than three of its members shall be the action of the entire Board. Written minutes shall be kept of the meetings and actions of the Board.

The Secretary, acting on behalf of the Board, shall have the power to execute all documents necessary to carry out the actions of the Board; and any person, partnership, corporation or government agency shall accept such documents over such signature or signatures as if executed by the Board.

§ 30-23 Provisions relating to the Township.

It is the expectation of the Township that it will continue this pension plan indefinitely and will, from time to time, contribute to the fund such amounts as may be needed to provide the benefits set forth in the plan.

The provisions of any ordinance establishing, amending, or maintaining the plan shall not be a charge on any other fund in the Treasury of the Township or under its control, save the Uniformed Employee's Pension Fund herein provided for.

Nothing contained in the plan shall be held or construed as a contract or guaranty of employment nor to create any liability upon the Township to retain any person in its service. The Township reserves the full right to discontinue the service of any person without any liability except for salary or wages that may be due and paid whenever, in its judgment, its best interests so require, and such discontinuance shall be without regard to this plan.

§ 30-24 Termination or amendment of plan.

The Township may amend this plan from time to time as is necessary to maintain its actuarial soundness and to incorporate changes in plan benefits or entitlements. However, no amendment shall be made which will, in any manner, divert any part of the fund to any purpose other than the exclusive benefit of members or their beneficiaries (except that, upon termination, such diversion may be made after all of the fixed and contingent liabilities to members and their beneficiaries have been met); nor shall any amendment be made at any time which will in any manner divest any benefit then vested in a member or reduce or eliminate a benefit to which a member has been given an expectation by virtue of the pension ordinance or pension calculations for retiring officers who retired during the member's participation in this plan.

In the event of termination of this plan, the Board shall allocate the assets then remaining in the fund as follows:

Sufficient funds shall be maintained to provide the pension benefits prescribed in Article III for all members who have retired prior to termination or who are eligible for retirement at the time of the termination of this fund.

Contributions with interest at a rate established by the Board as provided in Article III shall be refunded to any and all members who terminate service at the time of the termination of the fund.

Of the remaining funds, those which can be identified as municipality contributions or contributions other than from members or from the commonwealth allocation shall be distributed as the Board sees fit, provided that such distribution is in compliance with § 30-21.

(4)

All funds in excess of the funds described in Subsection B(1), (2), and (3) above shall be returned to the commonwealth as unused funds pursuant to the Act of May 12, 1943, P.L. 259, as amended, 72 P.S. § 2263.1 et seq.

§ 30-25 Miscellaneous provisions.

No benefit under this plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, or encumbrance, nor to seizure, attachment, or other legal process for the debts of any member or member's beneficiary. This provision shall not apply to a "qualified domestic relations order," defined in Code Section 414 (p),[1] and those other domestic relations orders permitted to be so treated by the Board under the provisions of the Retirement Equity Act of 1984. The Township shall establish a written procedure to determine the qualified status of domestic relations orders to administer distributions under such qualified orders. Further, to the extent provided under a qualified domestic relations order, a former spouse of a member shall be treated as the spouse or surviving spouse for all purposes under this plan.

[1]

Editor's Note: Refers to the Internal Revenue Code.

Any person dealing with the Township may rely upon a copy of this plan and any amendments thereto certified to be true and correct by the trustee.

In no circumstances, whether upon amendment or termination of this plan or otherwise, shall any part of the fund be used or diverted to any purpose other than the exclusive benefit of members or their beneficiaries until all of the actuarial obligations to such member's or members' beneficiaries have been met.

If the Board deems any person incapable of receiving benefits to which he is entitled by reason of minority, illness, infirmity, or other incapacity, it may make payment directly for the benefit of such person to the guardian or trustee for said person, whose receipt shall be complete acquittance therefore. Such payment shall, to the extent therefor, discharge all liability of the Township or the fund.

Should any provision of this plan be determined to be void by any court, the plan will continue to operate and, to the extent necessary, will be deemed not to include the provision determined to be void.

Headings and captions provided herein are for convenience only and shall not be deemed part of the plan.

This plan shall be construed and applied under the laws of the Commonwealth of Pennsylvania where not in conflict with federal laws, which shall prevail.

This article repeals all other ordinances prior to the date of its enactment.

§ 30-26 Act 44 Retirement Program.

[Added 10-12-2020 by Ord. No. 2020-05]

Title. This section shall be known as the "Newtown Township Police Act 44 Retirement Program."

Definitions. When used in this section, the below words shall have the meanings indicated.

ACT 44 PROGRAM

The Act 44 Deferred Retirement Option Program referred to in the collective bargaining agreement between the Newtown Township Police, represented by the Delaware County Fraternal Order of Police, Lodge No. 27, and the Township of Newtown.

ACT 44 PROGRAM ACCOUNT

Separate ledger account created to accept Act 44 Program participants' monthly pension benefit while an Act 44 Program participant, as well as any interest thereon.

DROP

Deferred Retirement Option Program.

FUND or PLAN

The Police Pension Plan.

PARTICIPANT

A police officer who meets the eligibility for and has executed the proper documents for participation in the Act 44 Program and has had such application approved by the Township.

POLICE OFFICERS

Police officers of the Newtown Police Department.

TOWNSHIP

Township of Newtown, Delaware County, Pennsylvania.

Eligibility. Eligibility for the Act 44 Program shall be determined as follows:

Police officers who have not retired prior to the implementation of the Act 44 Program may enter into the Act 44 Program on the first day of any month following completion of 25 years of credited service and attaining the age of 50, i.e., superannuation date.

Written election. Eligible officers who wish to be participants in the Act 44 Program must signify that intention, in writing, as follows:

A police officer electing to participate in the Act 44 Program must complete and execute an Act 44 Program Participation Election Form prepared by the Township, which shall evidence the member's election to participate in the Act 44 Program. The form must be signed by the police officer and be notarized and submitted to the Township Secretary. The Act 44 Program Participation Election Form shall include an irrevocable notice to the Township, by the police officer member, that the police officer shall resign from employment with the Police Department effective on a specific date (the "resignation date") that is no later than 60 months from the effective date of the Act 44 Program Election Form. Officers must exit the Act 44 Program no later than age 63 (except as to officers who are at least 61 years of age as of January 1, 2020, who shall be eligible for up to 60 months in the Act 44 Program subject to the requirement that they must exit no later than age 67.5. A police officer shall cease to work as and may no longer be employed as a police officer on the officer's resignation date, unless the Township properly terminates or honorably discharges the officer prior to the resignation date. A participant may resign from employment while in Act 44 Program status, which shall terminate his/her participation in the Act 44 Program.

In addition to the above information, the Act 44 Program Participation Election Form shall also advise the employee of the following:

(a)

An explanation of the participant's rights and obligations while in the Act 44 Program;

(b)

That, as a condition of Act 44 Program participation, the participant foregoes active participation in the Police Pension Plan and foregoes any recalculation of pension benefits to include salary increases occurring after Act 44 Program participation commences; and

(c)

That the Act 44 Program participant's service while in the Act 44 Program will not count as pension service, nor will it entitle a participant to any service increment benefits to which the participant was not entitled prior to commencing Act 44 Program participation. An Act 44 Program participant must also complete any and all retirement documents required by the Police Pension Plan Administrator, and such documents must be filed and presented to the Township for approval of retirement and payment of pension. Once an Act 44 Program Participation Election Form has been approved by the Township, it is irrevocable. Likewise, once an Act 44 Program participant enters the Act 44 Program, the participant may not subsequently leave and then reenter the Act 44 Program, even if the employee separates from employment and subsequently begins employment with the Township again.

Benefit calculation. For all pension plan purposes, continuous service of a police officer participating in the Act 44 Program shall remain as it existed on the effective date of commencement of participation in the Act 44 Program. Service thereafter shall not be recognized or used for the calculation or determination of any benefits payable by the Township Police Pension Plan. The average monthly compensation of the police officer for pension calculation purposes shall remain as it existed on the effective date of commencement of participation in the Act 44 Program. Earnings or increases in earnings thereafter shall not be recognized or used for the calculation or determination of any benefits payable by the pension plan. The pension benefit payable to the members shall increase only as a result of cost of living adjustments in effect on the effective date of the member's participation in the Act 44 Program or by applicable cost of living adjustments granted thereafter.

Accumulation of the Act 44 Program account. The monthly retirement benefits that would have been payable had the police officer elected to cease employment and receive a normal retirement benefit shall, upon the police officer commencing participation in the Act 44 Program, accumulate to the benefit of that officer and be accounted for on that police officer's Act 44 Program account. Participants shall not have the option of self-directed investment of their individual Act 44 Program account while in the Act 44 Program. Instead, the monies shall be invested in a fund to be identified and selected solely by the Township in accordance with applicable law so as to generate a rate of return of no less than 0% and no more than 4.5%.

Accrual of nonpension benefits. After a police officer elects to participate in the Act 44 Program, all other contractual benefits shall continue to accrue with the exception of those provisions relating to the Police Pension Plan.

Payout. Upon separation from employment, the Act 44 Program payout options available to the Act 44 Program participant shall be as follows:

The balance of the Act 44 Program participant's account, less withholding taxes, if any, remitted to the Internal Revenue Service, shall be paid to the participant or the participant's surviving beneficiary.

The balance of the Act 44 Program participant's account shall be paid directly to the custodian of an eligible retirement plan as defined by Internal Revenue Code Section 402(c)(8)(b), or in the case of an eligible rollover distribution to the surviving spouse of a deceased Act 44 Program participant, an eligible retirement plan that is an individual retirement account or an individual retirement annuity as defined by Internal Revenue Code Section 402(c)(9).